09:40     HANISON<00896> - Announcement (2)                                   

    6 September 2004                                                          
                                                                              
    Parties:                                                                  
                                                                              
    HCL and Hip Hing                                                          
                                                                              
    To the best of the Directors' knowledge, information and belief and       
    having made reasonable enquiry, Hip Hing and its ultimate beneficial      
    owners are third parties independent of and are not connected with the    
    Company and its connected persons.                                        
                                                                              
    Purpose of the Joint Venture:                                             
                                                                              
    The Joint Venture was formed as a contractual arrangement for the sole    
    purpose of submitting the Tender and construction of the Works. Such      
    Works are expected to be completed around July 2006.                      
                                                                              
    Principal terms of the Joint Venture agreement:                           
                                                                              
    The principal terms agreed by HCL and Hip Hing under the Joint Venture    
    agreement include the following:                                          
                                                                              
    (1)        all profits and losses arising out of the Joint Venture and    
    all costs, expenses and pecuniary obligations arising out of or           
    resulting therefrom shall be shared by HCL and Hip Hing in the ratio      
    of 50:50, provided that neither HCL nor Hip Hing shall be liable for      
    all costs, expenses or pecuniary obligations not provided for in the      
    contract (to be entered into under the Tender as awarded) but incurred    
    on behalf of the Joint Venture by HCL or Hip Hing unilaterally unless     
    such sums previously have been approved of in writing under the Joint     
    Venture.                                                                  
                                                                              
    (2)        both HCL and Hip Hing shall each be entitled to appoint 1      
    representative and 1 alternate representative of the management           
    committee of the Joint Venture with equal voting rights and no            
    representative shall be entitled to a casting vote.                       
                                                                              
    For accounting purposes, the Joint Venture will be recorded as a          
    jointly controlled entity in the accounts of the Company.                 
                                                                              
    TERMS OF THE TRANSACTIONS                                                 
                                                                              
    Date:                                                                     
                                                                              
    4 March 2005                                                              
                                                                              
    Transactions:                                                             
                                                                              
    The total funding commitment and guarantees put up by HCL together        
    amount to approximately HK$46,393,000. An identical funding commitment    
    and guarantees on identical terms, have been agreed, and put up, in       
    respect of the Joint Venture by Hip Hing, which participates in the       
    Joint Venture with HCL on a 50:50 basis.                                  
                                                                              
    The amount of advance provided was determined on the basis of the         
    estimated working capital requirement of the Works throughout the         
    construction period. The amount of guarantees provided was determined     
    by reference to the total amount of performance bonds which represents    
    11% of the contract sum as specified in the letter of award of the        
    Works.                                                                    
                                                                              
    The Company anticipates that the Transactions will be funded from         
    internal resources of, and/or bank loans obtained by, the Company and/    
    or shareholders' loans (as necessary) from the Group, the terms of        
    which shareholders' loans shall be determined at the relevant time by     
    the Group.                                                                
                                                                              
    REASONS FOR THE TRANSACTIONS AND THE JOINT VENTURE                        
                                                                              
    Members of the Group have entered into joint ventures on construction     
    projects in the past. The Directors believe that the Transactions are     
    essential for the operations of the Joint Venture, which would enhance    
    the Group's profile in the construction industry in Hong Kong and the     
    profitability of the Group.                                               
                                                                              
    The Directors believe that terms of the Transactions are fair and         
    reasonable and in the interests of the Company and its shareholders as    
    a whole.                                                                  
                                                                              
    LISTING RULES IMPLICATIONS OF THE TRANSACTIONS                            
                                                                              
    The total funding commitment and guarantees put up by HCL together